Wednesday, December 23, 2009

Acquisition and Contracting Improvement Plans and Pilots

On Monday, OMB released a report that identified more than $19 billion in contracting savings that Federal agencies expect to achieve in fiscal year 2010. This is nearly half of the Administration's $40 billion two-year goal. Of course, none of these savings have materialized yet, they're are simply projections. In reality, costs are going to increase, not decrease, as most agencies will see a five percent increase in their acquisition workforce this year, more than offsetting any saving to be achieved by these programs.

According to the OMB report, key acquisition reform actions include
  • Agencies will cut contracting costs by 3.5 percent.
  • Agencies are taking aggressive steps to improve accountability and management oversight
  • Agencies are working to reduce their reliance on high-risk contracting by 10 percent
  • Agencies are piloting new tools to determine the best mix of skills and workforce size for their organizations.

To achieve contract savings, one Agency standardized information technology. Another auctioned off some contracts and a third used in-house experts to improve a product.

To cut back on high-risk contracts, one Agency broke up a large cost-type contract into smaller competitive awards. Another converted a cost-type to a fixed price and a third initiated a peer review process that improved efficiency.

It is hard for us to get excited about these claims. Every administration want to reduce procurement cost. They initiate studies and pilot projects, claim victory, and go home. Yet when all is said and done, cost just keep rising. Does anyone really believe this stuff? What is most amazing to us is that when OMB briefed this report to reporters, some actually showed up. To view the entire OMB report, go here.

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